Grayscale’s Bitcoin Trust Stabilizes as Company Eyes Fee Reduction and New ETFs

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Grayscale Investments CEO Michael Sonnenshein discusses the stabilization of the Grayscale Bitcoin Trust (GBTC) and plans for fee reductions and new product offerings, including a potential spot ether ETF. The company also seeks to adjust GBTC’s high fees as the crypto market matures.

Grayscale Investments, a leading crypto asset manager, is witnessing signs of stabilization in its Grayscale Bitcoin Trust (GBTC), with CEO Michael Sonnenshein discussing the current state on this week’s episode of Inside ETFs. He shared, “We do believe that the fund has started to reach a little bit of an equilibrium where some of those anticipated outflows, whether it was some of the bankruptcy selling, some investors perhaps undertaking switch trades, (are) largely behind us.”

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Sonnenshein elaborated that previous outflows were partially due to reactions to events like the FTX bankruptcy, as well as some investors switching their investments from Grayscale’s ETF to other products. He emphasized the importance of bringing more investors into the ecosystem and continuing to innovate with their product offerings.

Following its conversion from a bitcoin trust to a spot bitcoin exchange-traded fund (ETF), GBTC began trading on the NYSE Arca on January 11. This was after the U.S. Securities and Exchange Commission (SEC) approved 11 spot bitcoin ETFs the previous day. As of April 12, GBTC’s holdings were reported to exceed 314,145 bitcoins, with total outflows since its inception estimated at over $16.27 billion or 305,128 BTC, according to Bitmex Research.

Despite having the highest annual fee among U.S. spot bitcoin ETFs at 1.5%, Grayscale is planning to adjust GBTC’s fee structure. Sonnenshein commented, “Over time, as markets mature, we anticipate that GBTC’s fees will come down.” The firm is also seeking to introduce a new Bitcoin Mini Trust with a more competitive fee.

Additionally, Grayscale is pursuing SEC approval to convert its Grayscale Ethereum Trust into a spot ether ETF. This move follows a successful legal challenge against the SEC’s rejection of their application to convert the bitcoin trust into a spot bitcoin ETF, leading to a court decision that compelled the SEC to approve the establishment of spot bitcoin ETFs earlier in the year.

Also Read, Bitcoin Faces Volatile Market: $871 Million in Liquidations as Price Dips Sharply

BlackRock’s IBIT Bitcoin ETF Hits $15 Billion in Inflows Just Three Months After Launch

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